Guide · Family
Paying grandparents or family for childcare
What's fair to pay a relative, and the U.S. tax rules that treat family differently.
Short answer
No data tracks what families pay relatives, so most agree on something at or below the local babysitting rate. On taxes, wages paid to your parent, your child under 21 or your spouse usually don’t trigger Social Security and Medicare, and payments to a grandparent who isn’t your dependent can count toward the child care credit.
Ways families pay relatives
- An hourly rateA discount on the local rate, tracked like any sitter.
- A weekly amountSimple for regular care, easy to budget.
- Costs coveredGas, groceries, outings, instead of or alongside pay.
- Nothing, by choiceSome grandparents prefer it; a thank-you still helps.
Household-employer taxes
The $3,000 Social Security and Medicare threshold for 2026 doesn’t apply to wages paid to:
- your spouse;
- your child under 21;
- your parent, unless they care for your child who is under 18 (or needs adult care) and you are divorced and not remarried, widowed, or your spouse can’t care for the child.
The same three are excluded from federal unemployment tax. Other relatives, such as a sibling or an aunt, are treated like any other household employee. See babysitter taxes in 2026.
The child and dependent care credit
Under IRS Publication 503, care payments don’t count toward the credit if they go to:
- someone you (or your spouse, if filing jointly) can claim as a dependent;
- your child who was under 19 at the end of the year, even if not your dependent;
- a person who was your spouse at any time during the year;
- the parent of your qualifying person, if that person is your child under 13.
A grandparent who isn’t your dependent isn’t on that list, so payments to them can count. Keep a record of what you paid and when.
SitterRate for iPhone
Keep a record, even for family
Save Grandma as a sitter with her own rate, log each day, and keep a dated history of what you paid.
- A saved sitter with a custom rate
- Dated history of every session and payment
- Plain-text summaries; PDF with Pro
- No account; records stay on your iPhone
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Questions people ask
How much should I pay a grandparent for babysitting?
There's no survey of what families pay relatives. Many use the local babysitting rate as a reference (about $20–$26 an hour nationally for one child in 2026) and agree on something lower, a weekly amount, or covering costs like gas and meals.
Do I have to pay nanny tax if I pay my mother to watch my kids?
Usually not. Wages you pay your parent don't count for Social Security and Medicare, except when your parent cares for your child who is under 18 (or needs adult care for a condition) and you are divorced and not remarried, widowed, or living with a spouse who can't care for the child.
Can I claim the child care credit for paying a grandparent?
Possibly. Payments don't count if they go to someone you can claim as a dependent, your child under 19, your spouse, or the parent of your qualifying child. Payments to a grandparent who isn't your dependent can count.
Can I use a dependent care FSA to pay a grandparent?
Check your plan's rules for payments to relatives. The 2026 limit for dependent care assistance is $7,500 ($3,750 if married filing separately).